The news hit like a freight train last Thursday – CoreLogic had acquired a la mode. The story sent shockwaves throughout the appraisal industry, and it’s no reach to say that the general response, at least on social media, has been negative.
Appraisers have been nervous about CoreLogic’s growing influence over our industry for some time now, and their acquisition of a la mode sent this sentiment into overdrive. The word “monopoly” has been thrown around on forums and blog posts, and I even saw one appraiser on Facebook comparing this to the “big bad wolf eating up the little sheep.”
I was driving when I first heard the news, and honestly, it felt like I’d been punched in the gut. Questions like “What does this mean for me?”, “What does this mean for appraisers?” and “What does it mean for the future of our profession?” flew through my mind. Later that day, after some time to process, I hopped on a live Facebook chat with my All-Star Team members, and delivered a bit of a different message (you can sign up here if you’d like to hear that in all its glory).
Sometimes trusting our gut reactions can work, but it can also be a good idea to take a step back, take a deep breath, and really think about what’s happened. That’s why I haven’t written this blog until now. I wanted to calm down, digest the news, and consider – and bear with me here – what positives we can take out of this story.
I’m a positive guy by nature, but I’m also a realist. I fully understand the negative side to all this, and the justified worries that appraisers will have. The point is that – in just a few days – all of that negative stuff has been written about and discussed to death. That’s why I want to offer something different in this blog, in which I’m aiming to provide a little ray of sunshine on this whole issue. I want to draw your attention to three possible – and please note the word “possible” – silver linings to CoreLogic’s acquisition of a la mode.
Firstly, there’s the question of integration. Have you ever tried to build a website just by using HTML, starting with just a blank page? It’s pretty hard! You know what’s a whole lot easier? Using WordPress. With WordPress you can start with a premade theme, and add in plugins, shopping carts, polls and surveys, email signup forms… the list goes on. The point is that that integration makes the process of creating a website a thousand times easier. If we do end up with a single company which integrates all the services we need to use as appraisers, then couldn’t that potentially make our jobs a whole lot easier too?
Secondly, there’s the question of data. The nature of real estate appraisal has changed over the years. Arguably our main sources of value used to be that we were the data keepers. Our clients would come to us for the data they needed. Needless to say, that’s not the case any more. Fannie Mae in particular has gobbled up all the appraisal data points and put them into their UAD system, which they do not in turn share with us. Seeing as we’re the ones giving Fannie Mae that data, that certainly doesn’t seem very fair.
One of the big questions that’s come from CoreLogic’s acquisition is “What happens to the data?” I’d put a positive twist on this. I’d ask whether, on some level, this could be a positive thing relating to the data. We’re certainly not happy with the Fannie Mae situation at the moment – what if this acquisition frees up more of the data for us? It’s certainly a possibility.
Finally, we need to look at the future of real estate appraisal as a whole. Many appraisers have questioned whether their jobs will even be around three, five or ten years from now. In turn, a lot of these same people have quit the profession entirely for what they see as a safer future. I’m definitely not ready to jump ship myself, but I think their concerns are valid.
In this context, I think this acquisition has to be seen as a good thing. Let’s face it – we may not like CoreLogic, but they’re an extremely successful company run by smart people. Those same smart people just decided to make a big acquisition, purchasing software which allows real estate appraisers to do their job. Would they have done that if they thought this industry was at risk of dying out? I don’t think so. Instead of jumping ship themselves and concentrating on a different area, they’re still fully committed to appraisal. I think that’s a pretty positive sign, myself.
I want to finish off by addressing the elephant in the room. Yes, I am sponsored by a la mode, and have been since I began recording my podcast. But folks, if you think I would sell out my integrity, and deliberately lie about my feelings when it comes to this for a sponsorship, you clearly haven’t been following me very long. I pride myself on being a straight shooter – always have done, always will do – and I genuinely believe there are at least three potential silver linings we can find in this acquisition.
However you look at it, this is both a fascinating and incredibly important issue, and I would love to get your thoughts on it. Please do comment below with your thoughts on the acquisition. In the meantime, try to fight the overwhelming negativity that’s out there and stay positive, people!
For more information on this subject, please download and listen to The Appraiser Coach Podcast Episode 321 – Is There A Silver Lining (or 3) with CoreLogic’s Purchase of a la mode?
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Now Corelogic will have the same information that Fannie Mae gets
I will make my decision at the end of the year when my subscription to Alamode expires whether to jump ship or not. I don’t like Core Logic, they can only do harm to the industry, Alamode and appraisers.
I too will be researching alternative appraisal software providers.
I have worked with core logic for years, I subscribed to their data service until qpublic came along and offered better public data access than core logic. I accept assignments from them and have always been paid for my work in a timely manor. Will things change, probably not in the short run, however things always change when one company takes over another. Usually the big looser is the town with the corporate headquarters, typically corporate headquarters are moved to a location that is considered to be an advantage for the new owner. The top jobs move, board members are replaced for new owner picks and business goes on in the direction the new owner wants to take the company.
Your observations, while wildly optimistic and within character, seem to overlook their objective which is to bring products and services that will streamline their clients workflow and deliver specific products that will shorten the time required to complete the (mortgage) closing process. Reading a recent statement from their annual release, will show that the products in question are designed to directly affect the Appraisal Industry. If you cannot see this, then in my opinion, you are biased, but passionate. They did not buy Ala Mode for their software, they bought it for the data currently in place and all future data they can acquire.
Having been in the industry for 20+ years now, one thing has been very consistent, the sheer number of negative individuals expressing doom and gloom! Those of us who have been doing this through several economic booms and busts have listened to those screaming ‘this is the end!’, which has only benefitted me personally as an exodus of appraisers always follows. This leaves my clients with fewer appraisers to call and the fees typically go up as a result. I’m quite ok with that! Will this affect the industry? Of course it will. The bubble we’re in will eventually burst and that too will affect the industry. Those of you who want to jump ship, please jump! These kinds of ‘culling’ events can be refreshing for industries because those who can’t, or aren’t willing, to change and evolve only bring down the rest of the group. Thank you Dustin for bringing some positivity to picture. Keep up the good work.
Corelogic is fact of Life, they clearly are in control of More Data than any other source, I just can not see them purchasing the # 1 appraisal software company to destroy appraisers, with what they offer it could complete the road al la mode was on with titan to offer appraisers who opt in share data extracted from other Titan reports which could even the playing field with “CU” who shares nothing but expects every appraiser to duplicate all field in the Sales Comparison Grid and report same condition, I truly do not think Corelogic intentions are to destroy the appraiser, they intend to make a profit using the appraiser and this will result in Change but whats new I have been appraising for well over 3 decades , we are long way from were I started and change will continue and appraisers will continue to panic . This Could have a Silver Lining
My concern with companies that are heavily into mergers and acquisitions are several. They are usually heavily debt burdened which leads to instability and high employee turnover. They typically strip research and development which Alamode was famous for their cutting edge technology and then they will exploit patents. A good example of that is their acquisition of Mercury Network and Appraisal Port then raising transaction fees. Appraisal Port fees are now roughly $30 per transaction. This is money for nothing with very high profit margins. Alamode had the R&D to create another delivery agent like Mercury to compete against them once their non-compete agreement was up. Buying out the whole company just closed that loop. Mark my words Mercury fees will be going up very soon you will see $30 transaction fees by next spring on Mercury and $5 $10 per transaction on Data Courier, which is currently free
I wish Corelogic a long and continued success as they are the entity which manages my 401(k) from my tenure as an employee of RELS Valuation. I received my quarterly statement yesterday but haven’t looked at it yet. They have contributed significantly to my retirement account by taking advantage of the current economic climate through their management of my fund.
I had the same reaction as you. I was mad because I knew alamode had been data mining for ever, but I knew or thought that they would never sell out to someone that would exploit it. Then after a few days of taking it in, its the same thing my regional bank has been doing for the past 15 years. When customers come in for a loan (non purchase) they have the choice to have a evaluation or a appraisal. Corelogic has always paid me fair and quickly when I have worked for them. As long as Joel Baker is with the company, I believe that it will stay the leader in innovation of the appraisal software as it has been in the past. Corelogic is a business and since they have bought it primarily for the data, they also bought it because alamode is 40,000 strong and has a solid bottom line.
WHERE IS BILL? SEEK THE TRUTH
Everything will be OK…that’s my optimism showing up and prayer works.
What does Dave Biggers think? If Core Logic can further upgrade the product and provide greater functionality to me the customer, then it should work out.
The appraisal process will become automated. Thats the future for appraisers doing bank work.
My father-in-law always used SFREP in the past, so when I started I just started using SFREP. I’ve since gone on my own, and I have been seriously contemplating moving over to A la mode. Now, I’m in wait and see mode. I have no intention of switching over to A la mode any time soon. I’m not a fan of Corelogic and this brings up many red flags. I appreciate your positive spin – and I agree that it’s not entirely a bad thing – but if we were to have a fair and balanced debate here, I think there are more red flags than silver linings. As for me, my partner, and my entire company, we are happy with SFREP for the time being.
I do not think anyone is expressing Doom and Gloom for this industry. Just evolution. Nobody is saying Corelogic isn’t run by smart people. But they own so much of the Valuation Industry right now and will continue to gobble it up. Competition just keeps everyone honest. Hopefully by calling attention to them, others will step forward and compete.
Remember Countrywide?? Too big and everyone suffered as a result of one company writing more mortgages than anyone else. They created the road to the Hell we call the Economic Downturn in 2008. And appraisers suffered the most with the AMC decision, and the enormous amount of appraiser fees lost.
Time to reconsider what you are charging for your hard work.
The minute I call for support at 2 am and get routed to some far away land with technicians that I can’t understand and keeps apologizing for everything, I quite alamode. The software has aspects beyond my needs but the service contract and the technicians is what keeps me loyal. They’re the best both in knowledge and attitude. Silver linings … we’ll see about that. And, yes I agree that CoreLogic is capitalizing on our data. We get paid for the appraisal report that is used in a financial transaction but what happened to that little law that says it’s a legal document and it’s ‘confidential’. If FNMA, CoreLogic and the other guerrillas out there are dissecting the our concepts, opinions, and our data and using it for forecasting and AVMs why aren’t we getting paid for providing them with our work that is being used for purposes other than what is stated on each form ???? Seems like we’ve been getting ripped off in this area since licensing started.
So many comments trying to make this out to be a “positive” thing for appraisers. Seriously?????
Won’t waste my time trying to convince you otherwise.
ANYONE who thinks CoreLogic is a company that they want to work with is on a different world than me.
We shall see folks.
Don’t say I didn’t warn you. 😉
Positive spin? Hard to believe. I understand Corelogic grew from e-appraisit (sp?) which was party to the Washington Mutual and Landsafe crew that pushed the whole real estate market into the 2008-10 crash. Now they own Marshall & Swift (control the cost approach), multiple listing services in most of the country (the market and income approaches data), multiple delivery portals, and the largest appraisal software company in the country. An older definition of a monopoly is the exclusive control of a product or service. Today, we know that control does not have to be exclusive to have a value impact for the holder of a large share of control. Some control will be enough to raise prices / profits or drop prices to drive out competition and provide more control in the future. The FTC needs to look very carefully at corelogics purchase and determine their impact.
Of course appraising is evolving and very challenging to find a “concrete” positive item in your 3 points, Justin. I don’t think corelogic has made any announcements about committing to any of them. That said, buying ala mode is “putting their money” into the industry. But does it just reflect back to allowing them more control of the data?
My guess about the future is that appraisers will still be needed to be the hands and eyes in the field. Vinyl flooring and formica counters in photos look a lot like ceramic tile and granite. Fresh paint on siding in poor condition, still looks like fresh paint unless you can touch it.
Thus an actual inspection would validate which property has “superior” quality and condition.
Also being an “unbiased” party to transactions should be considered by the lenders as a valuable perspective, but “unbiased” logarithms would be considered our equal by all the “avm” companies. So maybe we’ll just become “well trained observers” of real estate.?
Lots of food for thought here. Thank you all. I happen to believe some Appraisers think they are good at forecasting while others are better at drawing conclusions from what they have factually observed. Both perspectives should be considered, but it is important to recognize that there is a huge difference between opinions based on the facts of the matter and ones based on hysteria or hype. Corelogic is clearly leaving big footprints in the world of big data. I much prefer being the guy who analyzes the little data, that’s where the real essence of “meaningful” can be found. After 28 years of appraising in the residential sector, big data still means BS.
Is CoreLogic run by smart people? Yes, they are indeed. They have staff appraisers. They pay their staff appraisers $17 per hour. No, that’s not a typo. Let that number sink in.
They expect their staff appraisers to do a MINIMUM of 40 appraisals per month, while only working 8 hours per day. A district manager told me that some staff appraisers regularly do 60 appraisal per month, while only working 50 hours per week. Okay. Sure. Of course, she wasn’t able to explain how this was possible.
California has minimum wage of $11 per hour. By 2022 it will be $15. Working at Jack In The Box will pay almost as much as CoreLogic pays its staff appraisers. However, working in the Fast Food industry doesn’t require an appraisal license, college degree, continuing education, USPAP every two years, E&O insurance, and they are not subject to state board complaints. Fast Food workers have the benefit of free meals, a chance for advancement, and an opportunity to own a franchise. And they don’t have to worry about disgruntled homeowners, realtors, or loan officers turning them into the state board.
Think CoreLogic is a great company? Go work for them as a staff appraiser. They’re always hiring.
I have noticed over the years (been appraising for 30) that many lenders do not care if a real appraiser “touches the freshly painted wood siding in poor condition,” or if they even read the entire appraisal (otherwise they would not ask for additional comments that have already been included. Lenders just want a document that will support the loan they want to make – same as always. And, same as always, when the market collapses, as it always does because of the lenders’ greed, they will blame the appraisers, regardless of which software they use.
This is in no way way a good thing for our society or profession. I am not here to convince you of otherwise but I will say this, Corelogic now has two of the most popular Appraisal software companies and owns a majority of the MLS around the country. None of this is good. People who love this profession are going to find less and less work as it is all finding its way to Corelogic first. Is this company run by smart people, I can not answer that what I can tell you is they have effectively takin control over the real estate business and soon will control who owns and who wont own real estate in the future. WATCH! And for any one with the belief that a loss of competition is a good thing for your business, WAKE UP your deeply troubled and confused.
Core logic now owns A La Mode. They made Biggers an offer he could not refuse and he took it. Done. As subscribers we now have a choice. I will make mine soon.
We paid A La Mode a lot of $ over the years. That being said my retirement never looked so good.
20 +/- minutes to deliver a report
Additional comments that are already in the report
Additional comps to consider that are mostly useless
$325 fee for the 1004
Living the dream
I think that forms based appraisal applications are a hindrance and unnecessary expense in this day and age. Objectively we should just be doing everything in speadsheet and database applications of our choosing , like Libre Office or using a cross-platform FOSS application designed and managed by a group of residential appraisers/software designers or by a professional organization like AI or NAIFA. Imagine using sheets and automation we can adapt for the unique features of our local markets and the differing quality data sources we deal with. Imagine using something like the “Concatenate” function to automatically assemble data and form some of the specific sentences that go in your reports as support your adjustments or to describe markets. The MISMO XML format required for UAD is is a fine standard but also the main thing preventing us from using our own software and being far more efficient since we can not convert or export directly to it . Currently I do most of my mortgage appraisals and automated tasks within in them using custom sheets and then link up with the appraisal software later so I can use the few features they offer that I haven’t figured out how to automate on my own yet including making that MISMO XML file for the clients. If I knew how to make the conversion table needed to create MISMO XML files from ODS files I think I’d be 75-85% ready to drop appraisal software altogether.
I got into this business in 1991. I went to my first appraiser dinner/meeting shortly after that. The guest speaker who was an “expert” in the industry said that computers will soon put us out of business. I have been hearing the same line ever since. Last year I had my best year ever.
Remember, Corelogic gobbled up RELS from Wells Fargo and Landsafe from Bank of America (Mrss. Dodd and Frank would be rolling btw, conflict you say?), and ruined them both. Cut and slash across the board….always happens in a corp takeover….sorry old timers…..
I don’t really have an opinion on Corelogic – But what concerns me is what will happen to ala Mode In more than 30 years in the business I have NEVER found a company that gives better support than Ala Mode. Sure they have glitches but they sure do help a person (especially one who is technologically handicapped) solve their problems- Done, BTW, with great patience and understanding. I would sure hate to lose that. I expect I will wait and see.
CoreLogic is going to give us appraisers an excrement sandwich. Saying that this is in some way “positive” is just giving us a little mayonnaise and mustard to put on that sandwich.
Exactly… Thanks for your sponsored, “silver-lining” comments, Dustin.
From the other types of work I have done in my 30+ years of professional experience I can say the R E appraisal work is by far the most enjoyable in terms of independence and freedom to manage my own schedule. That said, all the mergers, closures, changes, and regulations have been eroding away the best aspects of the occupation. I hope the current govt administration will keep their promise on deregulation and let us get back to the go old’ days of direct communication with the end users of our reports. Otherwise we’re going down a slippery slope where the industry is doomed. Really don’t know C L was allow to become this big. Reminds me of AT&T before they the were split up by the FEDs in 1980. We shall see. Perhaps we will get lesser prices for software , however, less competition often leads to price gougeing
The simple solution to the spectre of proprietary data mis- and re-use is to place a “stock in trade” clause, in bold, at the top of your standard addendum. Something along the lines of, “The data, conclusions, and commentary included by the appraiser in this report are intended exclusively for the client’s use in making a single mortgage financing decision for the subject property. The information contained in this report, including the appraiser’s determination of which publically available data was used in the determination of his or her final estimate of value, the extent to which such data was considered, and any method used to analyse such data are considered the appraiser’s “stock in trade” and may not be used for any additional use or purpose. The appraiser expressly prohibits the use of the data, conclusions, or commentary from this report to create, support, or enhance any database, AVM scheme, government repository, or proprietary dataset except in the case that the report, as a whole, may be kept by the client in a manner similar to a paper record, and then only for record keeping purposes. Any additional use will be only at the appraiser’s discretion and must be negotiated with the appraiser prior to such use. Misuse of the contents of this report will be vigorously prosecuted.”
Money rules. Corelogic couldn’t care less about appraisers. They will make their business model whatever is most profitable. It is clear the future is using AI valuation systems and the appraiser will be outdated. Fees do not rise yet our fees constantly increase.our scope of work is constantly being increased with no increase in pay. There is a long term plan to phase us out. If you believe otherwise, you are naive. Step back and look at it. How would you slowly phase out appraisers? I would make them work harder for less and continue to overload them with requirements . Slowly the appraisers will jump ship. Also, look at what has happened regarding qualifications being decreased for Certified Residential Appraisers. During the mortgage crisis in 2008, the headlines focused on appraisal fraud which was less than 1% of the problem. It should have focused on mortgage fraud. Appraisers are the least respected State Certified careers. In no other career are people so audited. Others with different certifications are respected and not constantly challenged. We have people out of college sitting behind a desk without a clue asking us to make changes, evaluate sales of non comparables and other which are ridiculous. The comments they require in report are many times ridiculous. Notice how the financial institutions are never prosecuted for unethical practices in regards to appraisers for the most part. I challenge you to turn in a lender for unethical practices to your appraisalboard. It wont be long before the lender finds something wrong with your report and you are being audited.
This company is only money motivated. Do not start with them! I purchased a server license, my server went down and they will not allow me to run 2 computers for a few months until I can get my server up or until my server license expires at which time I can either purchase another package or get my server back up. I purchased a server license in which I should be able to run multiple computers on. Money is all they think about and the sales staff is arrogant and one is a pompous a** (Keith Sp******). I am searching for another company. They went from one of the best companies to work with to the absolute worst. In addition I was FORCED to send an email stating I would only use the software on 1 computer and would not let me back in the software until I did… you cant make this up! I have a da*n server license!!! I’m absolutely done, I’m taking my appraisers (who have their own licenses) with me somewhere else and I will advertise negatively about this company forever. – Forrest Rowland